The Shanghai Composite Index is retreating from primary resistance at 2500. Reversal of 63-day Twiggs Momentum below zero warns of continuation of the primary down-trend. Recovery above 2500 is unlikely but would signal the start of a primary up-trend.
Hong Kong’s Hang Seng Index reversed below primary support at 20000 on the weekly chart. Fall of 63-day Twiggs Momentum below zero would strengthen the bear signal, offering an initial target of 17500.
The Shanghai Composite Index is testing resistance at 2500. Recovery of 63-day Twiggs Momentum above zero indicates a primary up-trend. Breakout above 2500 would confirm the signal — and assist an Australian recovery.
* Target calculation: 2500 + ( 2500 – 2250 ) = 2750
The Hang Seng is headed for another test of support at 20000. Failure would warn that the primary up-trend is weakening. Reversal of 63-day Twiggs Momentum below zero would strengthen a bear signal.
* Target calculation: 20 + ( 20 – 17.5 ) = 22.5
Dow Jones Hong Kong Index is holding above support at 410. Respect of support would confirm the primary up-trend already signaled by a 63-day Twiggs Momentum cross above zero.
The Hang Seng similarly respected support at 20000, indicating a primary up-trend, while rising 13-week Twiggs Money Flow indicates buying pressure.
* Target calculation: 20 + ( 20 – 17.5 ) = 22.5
The Shanghai Composite Index is headed for a test of resistance at 2500. Breakout would signal a primary up-trend. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal.
* Target calculation: 2500 + ( 2500 – 2250 ) = 2750
A primary up-trend on the Shanghai index would boost the recovery in Australia.
Michael Moran: While China excels at building and even incrementally improving established product lines like GM’s Buicks and countless other Western and Japanese goods manufactured there, it has struggled to innovate. Even in 2010, the year China officially overtook Japan as the world’s second largest economy, no Chinese brand could viably be called a household name in any Asian market, let alone in the wider world. The annual global branding study by the market research firm TNS found in 2010 that, while consumer brands from Denmark, Finland, South Korea, and Switzerland make the top 20, no Chinese product or brand appeared in the top 1,000.
……China can claw its way up the value-added food chain and move its companies beyond the goal of building a better, cheaper Buick and into the high-end, high-margin markets for software, aerospace, robotics, and sophisticated engineering currently dominated by the United States, Europe, and Japan. But the progress to date has been almost impossible to measure, and the country’s substandard educational system, demographic and political challenges, and corruption suggest that this will be more of a Long March than a Great Leap Forward.
via EconoMonitor : Last Days of Rome » How America Builds Its Way Back to Balance.
A weekly chart of the Hang Seng Index, with a long tail on last week’s candle, indicates respect of the 20000 support level. A 13-week Twiggs Money Flow trough above the zero line indicates buying pressure. Follow-through above 21000 would indicate an advance to 23000*, confirming the primary up-trend.
* Target calculation: 21.5 + ( 21.5 – 20 ) = 23
Dow Jones Shanghai Index respected support at the 2010 low of 275, indicating that a bottom is forming. Recovery of 63-day Twiggs Momentum above zero would signal a primary up-trend. Breakout above resistance at 310 would confirm, offering an initial target of 345*.
* Target calculation: 310 + ( 310 – 275 ) = 345
China’s Shanghai Composite Index broke support at 2300, suggesting continuation of the primary down-trend. Failure of primary support at 2150 would confirm the signal, offering a target of 1800*. A 63-day Twiggs Momentum peak below zero indicates continuation of the primary down-trend.
* Target calculation: 2150 – ( 2500 – 2150 ) = 1800
Hong Kong’s Hang Seng Index, however, is correcting to test medium-term support at 20000. Recovery of 63-day Twiggs Momentum above zero indicates a primary up-trend. Respect of the rising trendline would confirm, offering an initial target of 23000*.
* Target calculation: 21500 + ( 21500 – 20000 ) = 23000
Hong Kong’s Hang Seng Index is retracing after a sharp bearish divergence on 21-day Twiggs Money Flow. The longer term 13-week indicator, however, suggests no more than a secondary correction. Breach of the rising trendline, however, would warn that the trend is losing momentum.
* Target calculation: 20000 + ( 20000 – 17500 ) = 22500
The Shanghai Composite Index is retracing to test support at 2300. Failure would indicate continuation of the primary down-trend, while respect would suggest that a base is forming. A further peak below zero on 63-day Twiggs Momentum would signal another decline.
* Target calculation: 2150 – ( 2500 – 2150 ) = 1800
Data in recent weeks has painted an increasingly gloomy picture of slowing manufacturing, weak exports and tepid bank lending in China. The latest indicator to spook markets came Thursday with the flash HSBC Purchasing Managers’ Index, an initial reading on manufacturing activity in March. The PMI fell to a preliminary reading of 48.1, down from 49.6 in February.
The March PMI reading marks the fifth straight month the index has indicated contraction, signaling extended difficulties for the nation’s manufacturers. A reading below 50 indicates contraction from the previous month, while anything above that indicates growth.
Jamil Anderlini: Jon Huntsman, a former Republican presidential hopeful and US ambassador to China who met Mr Bo [Xilai, Communist Party chief of Chongqing] a number of times, said his demise revealed serious rifts among the top leadership of the country.
“The splits in the standing committee [over reform] are as pronounced now as they were during the [1989] Tiananmen Square period,” Mr Huntsman said. “Politics in China is a rough and tumble business. This is an open and public evidence of this and what happens behind the velvet curtain that the world never sees.”
via Beijing On Edge Amid Coup Rumors – Asia Business News – CNBC.
Patrick Chovanec: Top Party leaders, regardless of political philosophy, had come to dislike Bo [Xilai], not as a person per se — by all accounts, Bo is an extraordinarily charming man — but as a political persona, at least in his Chongqing incarnation, for three reasons:
First, they were offended by his courting of the media and his vigorous self-promotion, which showed a lack of appropriate deference and humility to established power channels and ways of resolving competition. Second, they felt threatened, because few of them were equipped to compete on this basis, if that’s what it took. Third, they were alarmed by Bo’s tactic of “mobilizing the masses” in ways that explicitly invoked the Cultural Revolution, which called up deep-seated fears that populist fervor could be used as a weapon against rival leaders within the Party — as indeed happened during the Cultural Revolution, to horrific results.
